Outsourcing

BICM outsourcing service proposals

BICM’s business process services and outsourcing solutions are rooted in operational experience of administering claims of diverse types including:

  • Car & motor comprehensive and third party liability
  • Car & motor 4D/GC (EU 4th Directive / Green Card)
  • General civil liability
  • Contract liability
  • Marine transport
  • Other types of transport
  • Cargo
  • Property
  • Product liability
  • Purchase
  • Health

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What is outsourcing?

The practice of outsourcing can be described as acquisition, typically in form of an ongoing association, by a principal company of services and/or goods from independent external vendor, whereas those services and/or goods were formerly supplied internally inside the enterprise.[1]

Considering this definition, it becomes clear that outsourcing is an instrument for running a company, just as other tools like marketing or investing, and decision to outsource is a variation of classical make–or–buy decision.[1][2] Additionally, outsourcing arrangement creates a unique hybrid commanding structure positioned between a straightforward contract–centered market relationship and an internal organizational order.[1]

Role of outsourcing in economy

Various design forms and degrees of outsourcing exist. One such arrangement is business process outsourcing (BPO), an industry with significant global weight that presently is valued at about 900 billion Euros, where insurance related outsourcing takes some 18 billion Euros.[3] Moreover, there is a strong dynamic for outsourcing trend to increase in the observable future in world as a whole, and growth of outsourcing market across Nordic European countries, in particular, is exceptionally rapid and, for instance, just finance and accounting related outsourcing expanded by 400% in four recent years.[4]

Outsourcing is an effective strategy for enterprises of all sizes—small to medium (SMEs / SMBs) businesses or large multinational corporations (MNCs), as companies of any magnitude and complexity can benefit from optimizing their processes.

Advantages of outsourcing

Benefits derived from decision to outsource are numerous and include:[3][4]

  • lower operating expenses
    • tapping into specialized readily organized resources, including human resources and technology infrastructure, at a flexible expense rate, brings scalability and peak capacity efficiency, compared to in–house solutions that require considerable fixed expenditure and capital spending
  • access to best practices, competencies and know–how
    • leveraging expertise and professional networks of outsourcing provider, including access to established contacts with governmental supervisory agencies that formed through regular work engagement
  • awareness of regulatory environment
    • laws, standards change over time with reforms taking place not only on national level but on supranational, European Union level, as well, making this environment a complex one to navigate without being immersed in rule compliance activities on a day–to–day basis
  • focus on core business
    • change is the only constant in today’s enterprise reality and by freeing portion of company’s attention from non–essential activities—core business will benefit from concentrated strategic emphasis
  • transformational development
    • through partnership and symbiotic relationship with a vendor that pursues continuous improvement of practices
 

References

  1. Strange, Roger (2009), ‘The outsourcing of primary activities: theoretical analysis and propositions’, Journal of Management & Governance, 15 (2), 249-69.
  2. Vaxevanou, Anthi and Nikolaos Konstantopoulos (2015), ‘Basic Principles the Philosophy of Outsourcing’, Procedia – Social and Behavioral Sciences Proceedings of the 3rd International Conference on Strategic Innovative Marketing (IC-SIM 2014), 175 567-71.
  3. Robert W. Baird Limited (2015), Transformation of Business Process Outsourcing: Business Models, Technology Enablement and M&A Themes in the Growing and Fragmented BPO Sector.
  4. Deloitte Statsautoriseret Revisionspartnerselskab (2015), Insight and trends in the Nordic market: Finance and accounting business process outsourcing.